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Perry Ellis International Announces Strong Results for Third Quarter of Fiscal 2011

^{Published on 2010-11-17 05:11:01 - Market Wire}
 

MIAMI--([ BUSINESS WIRE ])--Perry Ellis International, Inc. (NASDAQ:PERY) today reported results for the third quarter and nine months ended October 30, 2010.

"Our impressive third quarter results remain a testament to the strength of our brands and the resiliency of our diversified business model"

Third Quarter Operations Review

For the three months ended October 30, 2010 (athird quarter of fiscal 2011), total revenues increased 13% to $201.3 million, compared to $178.6 million in the third quarter ended October 31, 2009 (athird quarter of fiscal 2010a). Revenue increases were realized across numerous businesses- led by strong performance within Perry Ellis branded businesses, golf, retail and bottoms businesses.

aOur impressive third quarter results remain a testament to the strength of our brands and the resiliency of our diversified business model,a commented Oscar Feldenkreis, President and Chief Operating Officer of Perry Ellis International. aFocus on brands, product innovation and analytical planning systems have lead to a successful formula. Our partnership with all our major retail customers has enabled us to identify enhancements to drive business opportunities, which is evident in the results we reported today.a

Gross profit for the quarter was $71.6 million - an increase of 17% or $10.6 million compared to third quarter last year- resulting in gross margins improving by 140 basis points to 35.6% compared to 34.2% last year. Gross margin expansion for the quarter was driven by continued focus on inventory planning and optimizing sell through rates across retail doors.

Earnings before interest, tax, depreciation, and amortization (aEBITDAa) for the third quarter of fiscal 2011 grew 37% to $16.9 million compared to $12.3 million during the comparable period last year. This increase represents an EBITDA margin of 8.4% for the quarter. A table showing the reconciliation of EBITDA to net income is attached. In addition, the Company recognized a 73% increase in net income to $7.2 million representing $0.51 per fully diluted share for the quarter, compared to net income of $4.1 million and $0.31 per fully diluted share in the third quarter last year.

Balance Sheet Review

The Company remained in an outstanding financial position at quarter end. Disciplined working capital management provided for full availability under the senior credit facility. In addition, the Company reported $13.7 million in cash and cash equivalents.

Strategic inventory purchases to secure pricing and capacity resulted in quarter end inventory of $128.5 million, representing a 31% increase over third quarter last year and in-line with Company expectations. The increase was the result of the Companya™s plan to accelerate the receipt of goods in anticipation of possible price increases. Approximately $15 million or half of the increase is for goods to be shipped in fiscal 2012.

Nine Months Operations Review

For the nine months ended October 30, 2010 total revenue increased 5% to $583.4 million from $557.8 million during the nine months ended October 31, 2009. Throughout the first nine months of fiscal 2011 the Companya™s continued focus and strategy on driving sales of higher margin branded businesses paved the way for a solid 350 basis point improvement in gross margin to 35.7% compared to 32.2% last year.

The Company also saw a significant increase in net income to $16.4 million, an increase of almost 250% compared to net income of $4.7 million last year. This reflects a 250 basis point improvement in EBITDA margin to 7.6% for the first nine months of the year compared to last year.

Fiscal 2011 Guidance

The Company is increasing its fiscal 2011 earnings guidance based on better than expected year to date results. The Company currently expects diluted earnings per share in the range of $1.72 - $1.80 from the previously announced full fiscal 2011 year range of $1.53 - $1.68.

Revenues are expected to surpass $785 million for the full year.

aWe are extremely pleased with our results through the third quarter of fiscal 2011. We have successfully executed in the core platforms as well as the new business initiatives we launched coming into the year. We continue to remain optimistic as to performance of our brands and product categories going into the holiday season,a commented George Feldenkries, Chairman and Chief Executive Officer of Perry Ellis International.

About Perry Ellis International

Perry Ellis International, Inc. is a leading designer, distributor and licensor of a broad line of high quality men's and women's apparel, accessories, and fragrances. The Company's collection of dress and casual shirts, golf sportswear, sweaters, dress and casual pants and shorts, jeans wear, active wear and men's and women's swimwear is available through all major levels of retail distribution. The Company, through its wholly owned subsidiaries, owns a portfolio of nationally and internationally recognized brands including Perry Ellis®, Jantzen®, Laundry by Shelli Segal®, C&C California®, Cubavera®, Centro®, Solero®, Munsingwear®, Savane®, Original Penguin® by Munsingwear®, Grand Slam®, Natural Issue®, Pro Player®, the Havanera Co.®, Axis®, Tricots St. Raphael®, Gotcha®, Girl Star®, MCD® John Henry®, Mondo di Marco®, Redsand®, Manhattan®, Axist® and Farah®. The Company enhances its roster of brands by licensing trademarks from third parties including Pierre Cardin® for mena™s sportswear, Nike® and Jag® for swimwear, and Callaway®, TOP-FLITE®, PGA TOUR® and Champions Tour® for golf apparel. Additional information on the Company is available at [ http://www.pery.com ].

Safe Harbor Statement

We caution readers that the forward-looking statements (statements which are not historical facts) in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations rather than historical facts and they are indicated by words or phrases such as "anticipate," "could," "may," "might," "potential," "predict," "should," "estimate," "expect," "project," "believe," "plan," "envision," "continue," "intend," "target," "contemplate," or "will" and similar words or phrases or comparable terminology. We have based such forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements, many of which are beyond our control. These factors include: general economic conditions, a significant decrease in business from or loss of any of our major customers or programs, anticipated and unanticipated trends and conditions in our industry, including the impact of recent or future retail and wholesale consolidation, the effectiveness of our planned advertising, marketing and promotional campaigns, our ability to contain costs, disruptions in the supply chain, our future capital needs and our ability to obtain financing, our ability to integrate acquired businesses, trademarks, trade names and licenses, our ability to predict consumer preferences and changes in fashion trends and consumer acceptance of both new designs and newly introduced products, the termination or non-renewal of any material license agreements to which we are a party, changes in the costs of raw materials, labor and advertising, our ability to carry out growth strategies including expansion in international and direct to consumer retail markets, the level of consumer spending for apparel and other merchandise, our ability to compete, exposure to foreign currency risk and interest rate risk, possible disruption in commercial activities due to terrorist activity and armed conflict, and other factors set forth in Perry Ellis International's filings with the Securities and Exchange Commission. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those risks and uncertainties detailed in Perry Ellis' filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which are valid only as of the date they were made. We undertake no obligation to update or revise any forward-looking statements to reflect new information or the occurrence of unanticipated events or otherwise.